START-UP NY Tax Break Draws in 2 Academic Businesses

albany

Classbook.com, an online provider of educational materials and textbooks, is setting up an office in downtown Albany, New York in a move considered a win for a new job-creation initiative in the state.

The 2,800 square foot office will open at 418 Broadway in Albany.  The company already has another location in the area at 34 Commercial Drive in Castleton in Rensselaer County.

The addition is made possible through New York State’s START-UP NY tax-free incentive program, which agreed to make the company eligible for tax exemptions through help by the University at Albany.  As a requirement of the program, the downtown location is located near the university campus.

For 10 years, the company will not have to pay state income tax, business taxes, local taxes, sales taxes, property tax or franchise fees.

According to Governor Andrew Cuomo, Classbook.com will invest $227,600 into the local economy and create 72 new jobs.

“Today’s announcement is another demonstration that START-UP NY is working to bring new jobs and investment to communities across New York State,” Gov. Andrew M. Cuomo said. “With 72 new jobs coming to downtown Albany, START-UP NY is succeeding in attracting new and growing businesses to Upstate New York. Through START-UP NY, we took the State’s high tax liability and turned it on its head, making New York the least expensive place for businesses to locate, expand, and create new jobs.”

The company says it is the only firm to offer K-12 schools outsourcing capabilities for e-Book and print textbook orders.

CEO Tony Pfister couldn’t be reached for comment but in a prepared statement he said: “As a Capital Region native, I am pleased to be able to expand close to home and create new senior-level professional positions and economic growth in the area. The University at Albany, which has rich synergies in research and academic mission, is the perfect partner for ClassBook.”

Meanwhile, START-UP NY has come under fire by Republican gubernatorial candidate Rob Astorino, who recently referred to the program as “the biggest fraud on television.”  The initiative offers a 10-year tax break to tech companies who relocate or expand, and are usually owned by a college.  Astorino claims the program “picks and chooses winners,” namely, tech companies, over other businesses.  He believes the program will not last, predicting that businesses will simply pick up and leave the state after their 10-year period is over.

“They’re going to do what other companies have done: ‘Goodbye, we’re out of here,’ ” Astorino said.  “Why don’t we correct the problem that we know exists?” he said. “It’s why businesses are leaving the state in record numbers.”

Astorino would also like to see the state’s eight-tier graduated income tax be replaced by two simple brackets.

START-UP NY has also recently made it possible for BAK USA, a company focused on building low-cost tablets and smartphones for schools in Africa and also available for purchase in New York, to open a factory in Buffalo.

“Who said tablets have to be made in China?” founder JP Bak said. “We’re going to prove that it can be done here successfully, producing quality devices that are affordable.”